Saudi Aramco oil installion known as "Pump 3" seen in the desert near the oil-rich area of Khouris, 160 kms east of the Saudi capital Riyadh. (AFP Photo) / AFP

The UK government gave over a billion pounds of financial backing to fossil fuel projects around the world despite a pledge to support green technologies, it has emerged.

UK Export Finance (UKEF)
loans were handed out to Gazprom in Russia, state-owned oil and
gas giant Petrobras in Brazil and petrochemical companies in
Saudi Arabia, an investigation by Greenpeace has found.

The exposure will be a blow to Prime Minister David Cameron’s
green credentials, which have been in the spotlight since he said
he would lead the “greenest government ever” when
elected in 2010.

Even before entering Downing Street, Cameron wished to be seen as
a politician who took climate change seriously. He famously drove
a dog sled across the Arctic during a trip to see the effects of
climate change first hand.

UKEF financing is designed to support British exporters by
providing insurance, financial guarantees and loans to overseas
buyers.

UKEF provided over £380 million to Brazilian energy firm
Petrobras last financial year, in a deal which involves British
drilling services for oil and gas exploration. Petrobras has been
rocked by one of the biggest corruption scandals in Brazil’s
history, with a number of the company’s directors accused of
taking bribes.

Will McCallum, policy adviser at Greenpeace UK, said: “The
loophole allowing UK Export Finance to continue funding highly
polluting infrastructure, and the extraction of fuels we urgently
need to leave in the ground, is one that must be closed if the
government is to honor its international commitment to a 2C limit
[in temperature rises].”

The biggest financing project in UKEF’s history was a £470
million deal for the construction of a £12 billion petrochemical
plant in Saudi Arabia. The Sadara project is co-sponsored by
Saudi Aramco and Dow Chemical Company. When completed it will be
the largest petrochemical plant ever built in a single phase.

Lord Green, who was Minister for Trade and Investment at the
time, said: “The Sadara project affords export opportunities
to British businesses and I am pleased that UKEF support is
making the difference.”

Russian energy giant Gazprom has also received substantial
funding since 2010. Roughly £430 million of financial support has
been provided to enable the state-owned company to receive
engineering equipment from Rolls-Royce Power Engineering.

UKEF also gave £67 million in support for the export of mining
equipment to Siberian Coal & Energy Co (SUEK) and Southern
Kuzbass Coal Co OAO. The UK imports roughly 30 percent of its
Russian coal from SUEK, according to the Greenpeace report.

UKEF’s large-scale support for fossil fuel projects flies in the
face of the coalition government’s founding agreement.

“We will ensure that UK Trade and Investment and the Export
Credits Guarantee Department [UKEF is its operating name] become
champions for British companies that develop and export
innovative green technologies around the world, instead of
supporting investment in dirty fossil-fuel energy
production,” the 2010 agreement said.

Cameron is likely to come under personal scrutiny following the
Greenpeace revelations.

Speaking at the UN Climate Summit in 2014, Cameron argued for
investment in low carbon business.

“That means fighting against the economically and
environmentally perverse fossil fuel subsidies which distort free
markets and rip off taxpayers,” he said.

A spokeswoman for UKEF said: “For UKEF, dirty fossil-fuel
energy production would refer to projects producing pollution in
excess of international environmental standards. However, UKEF
adheres to the standards set out in the OECD Common Approaches
and will normally refuse support for exports to projects that do
not meet those standards.”

“UKEF has an extensive program of raising market awareness of
its products and services to companies in the renewables sector.
However demand has been low; many companies are concentrating on
the domestic market, many need equity and development finance,
rather than the services of UK Export Finance, and companies
which are exporting are focusing on mature markets where the need
for risk protection and export finance is limited.”